This Merger Will Not Be Televised
The FCC seeks to further consolidate local news
Welcome to You’re Probably Getting Screwed, a weekly newsletter and video series from J.D. Scholten and Justin Stofferahn about the Second Gilded Age and the ways economic concentration is putting politics and profits over working people.
The media industrial complex is set to get another gift from the federal government. Much attention was given last week to the 12 states that sued to block Paramount’s efforts to acquire Warner Brothers Discovery in a mega-merger that would be disastrous for Hollywood. The states were forced to act in part because the Department of Justice decided to clear the merger, reportedly over the objections of career staff in the Antitrust Division. As the DOJ is allowing media conglomerates to grow even larger, the Federal Communications Commission (FCC) is claiming it must remove ownership caps because the media conglomerates have so much power.
The FCC is a five-member commission (although it currently only has three members) responsible for regulating radio, television (satellite and cable included) and the internet. Last week FCC Chair Brendan Carr (the guy that spends a lot of time tweeting at late night TV hosts) announced the commission will take a vote next month on eliminating its current media ownership cap. The current cap prohibits any one person or company from owning television stations that combine to reach over 39% of Americans. It is a cap that has expanded greatly from its original limits.
Created in 1934, the FCC originally instituted a numerical cap on station ownership that limited companies to owning no more than three stations. This limit was increased over the years before settling on a 12 station limit in 1984. In 1985 the FCC adopted a national audience limitation in conjunction with the numerical limitation that capped ownership at 25%. The knockout blow came with passage of the Telecommunications Act of 1996 which deregulated media and lifted many of the protections against consolidation that had existed. The law eliminated numerical station limits and also reduced FCC regulations on cross ownership. Today just five companies control 90% of US media, down from 50 in 1983.
Passage of the 1996 law, which was part of a multi-decade bipartisan deregulation effort across the economy that removed protections against consolidation and financialization, helped create the local news monopolies we have today. Through a series of mergers and acquisitions, sometimes involving the FCC waving the ownership cap, just three companies – Sinclair Broadcast Group, Nexstar Media Group, and Gray Media – control around 40% of all local news stations and are present in over 80% of media markets. Those companies have been lobbying the FCC to eliminate the current ownership cap, although it is already mostly a suggestion. Nexstar’s 2025 acquisition of Tegna - then the fourth largest station owner - was allowed through a waiver of the ownership cap the FCC granted over the objections of the lone Democrat commissioner, Anna Gomez, who said ““This merger was approved behind closed doors with no open process, no full Commission vote, and no transparency for the consumers and communities who will bear the consequences.”
Carr, who has been the architect of the Trump Administration’s censorship regime, framed the Nexstar merger as necessary to help local stations level the playing field against the big four television networks. It is a similar sentiment that Carr has shared in supporting removal of the ownership cap, something it should be noted Gomez believes is illegal since it was Congress, not the FCC, that established the current 39% cap. In an op-ed for the right-wing media site Breitbart, Carr argued the ownership limits are antiquated today given consolidation among the national broadcasters like Comcast and Disney and the rise of streaming either directly from those companies or through platforms like YouTubeTV that have given these companies national broadcast reach. “Today, the cap is not protecting local broadcasters, it is preventing them from gaining the same scale that their competitors are free to enjoy,” Carr wrote.
Carr is correct that the media industry has changed dramatically in recent years and that the FCC’s current regulatory regime has not kept pace. However, like so much else in the economy, the solution is not to let monopoly power drive additional monopoly power. Carr’s framing suggests that we cannot treat streaming the way we treated cable and broadcast television. It is similar to the narrative that local newspapers have died as a result of the internet, instead of blaming the big tech companies that have come to control the internet and thus the advertising that could be going to local news outlets. If Carr really wants to protect local news, it “may require a new Telecommunications Act to reimagine local programming in the streaming age,” as David Dayen wrote in 2024.
Allowing Sinclair, Nexstar and Gray to further tighten their grip is not the solution. Research has found a range of harms from this consolidation. One is higher prices, as retransmission fees charged by these broadcast conglomerates have increased over 2,000% from $1.47 to $21.71 per month over the last 14 years. Those costs are then passed onto consumers as higher rates for cable and satellite services, which hit seniors and rural communities particularly hard. The quality and amount of local news has also decreased as these corporations have gained more control. Sinclair in particular has become well known for its conservative bias, but research has also found that when a station is acquired by Sinclair it shifts its focus to national news at the expense of local reporting. This even includes situations where Sinclaire has replaced entire local news desks with programming from the national news service they launched in 2021.
This further nationalizes our politics and can also create homogeneity among broadcasters that should be competing with one another for stories. A recent study by the University of Delaware found that 39% of TV markets had duplicating station pairs where two different stations ran nearly identical word-for-word content often as the result of various agreements between stations. But that duplication can also come from corporate headquarters. Nexstar for example has run programming across its stations urging viewers to contact the FCC to lift the ownership cap. The cuts to local news desks have also meant fewer jobs and lower wages for those that remain; a typical outcome of consolidation regardless of the industry. Finally, taxpayers also face higher costs from the decline of local news as it results in fewer watchdogs. While focused on newspapers, an economic analysis by Rebuild Local News released last month found local governments in news deserts pay roughly $1.1 billion in additional borrowing costs every year.
We talk a lot in this newsletter about what states can do or what you can do in your own community to fight the corporate power that is consuming our society. It becomes harder to do that if no one is reporting on those battles in your own backyard. Carr is right that the ownership cap is no longer an effective tool in protecting local news but that is not an argument for eliminating it. Instead we should strengthen it and make sure that all broadcasters, whether a streaming giant or cable company or anyone else, play by the same rules. Our democracy depends on it.
YOU’RE PROBABLY (ALSO) GETTING SCREWED BY:
John Deere
In early 2025 under then-chair Lina Khan the Federal Trade Commission sued farm equipment manufacturer John Deere for allegedly monopolizing the market for repair of tractors and combines. Modern day tractors and combines can have hundreds of software-enabled components and Deere (along with other manufacturers) use that software to lock down repairs and require farmers to use authorized dealers. Repair costs for farmers have increased 41% since 2020, which comes on top of all the other input costs that are rising and putting a squeeze on farmer’s balance sheets.
A couple of weeks ago the FTC along with the five states (Arizona, Illinois, Michigan, Minnesota and Wisconsin) on that lawsuit, settled with John Deere. While it would have been preferable to see this case go to trial, the Trump Administration has been pretty eager to settle the cases it inherited from the Biden Administration. Current FTC Chair Andrew Ferguson also voted against bringing the lawsuit last year while a commissioner.
Groups like the National Farmers Union and the Public Interest Research Group have characterized the settlement as a win for farmers as did right to repair advocate Willie Cade in an interview with 404 Media. Some of the language of what will be required of Deere resembles the language of right to repair legislation around the country. However, Matt Stoller at BIG details some of his concerns about the settlement and whether it will actually provide relief for farmers. What is true regardless of the strength of the settlement is that legislation is still needed, whether in Congress or at a state-level, to truly create a fairer marketplace for the repair of farm equipment.
Microtransactions
In our last newsletter I noted Sony’s recent announcement that beginning in January 2028 the company will cease producing physical Playstation games. It is not the only way the video game industry is screwing over consumers. Massive pushback from fans of EA Sports College Football series prompted EA, which was acquired by a consortium of private equity firms and Saudi Arabia’s sovereign wealth fund, to reverse course on microtransactions it had introduced into single-player modes.
This populist gamer groundswell has prompted Pablo Torre to dig into the enshittification of video games, including the conversation below with comedian and avid gamer, Dan Soder. This is particularly stark among annual sports titles where exclusive licenses have knocked out meaningful competition and companies have become focused on nickel and diming consumers instead of improving their product. Whether you play video games or not, the conversations Torre is having on this topic reveal the structural reasons for why everything across the economy is just getting crappier.
Rural Consolidation
JD wrote a piece recently in Barn Raiser that is an open letter of sorts to anyone considering running for president in 2028. JD’s message is that to grow rural America requires taking on the corporate power that has been draining it. “Stop treating rural America like a colony to be drained and start treating it like an economy to be built,” JD writes. “Rural America isn’t an economy that failed. It’s an economy that succeeded-just not for the people who live there.”
Big Ag
Thousands of Americans have been impacted by the cyclospora outbreak. While much of the coverage of the outbreak has focused on cuts to food safety, there is another more structural force behind this outbreak, consolidation! Claire Kelloway in Food & Power digs into the ways the consolidation of our food system makes outbreaks like these harder to stop, no matter what kind of food safety infrastructure is in place. Or as she aptly puts it, The Bigger the Corporation, the Bigger the Diarrhea Outbreak.
Artificial Intelligence
SOME GOOD NEWS:
Lina Khan is BACK
New York City Mayor Zohran Mamdani has appointed former Federal Trade Commission (FTC) chair Lina Khan to serve as the board chair of the New York City Economic Development Corporation. This follows Mamdani’s early appointment of Samuel Levine, the director of the FTC’s Bureau of Consumer Protection under Khan, to lead NYC’s Department of Consumer and Worker Protection. The move as you might imagine has not sat well with wealthy New Yorkers, but does give the Wall Street Journal Editorial Board something to do given all the op-eds they wrote bashing Khan during the Biden Administration.
BEFORE YOU GO
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Break Em Up,
Justin Stofferahn